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Difference between revisions of "LUNA Collapse in May 2022"
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As concern for a death spiral kept mounting, The Block reported that the Luna Foundation Guard was raising over $1b to prevent any further damages<ref>https://www.theblockcrypto.com/post/145978/luna-foundation-guard-seeks-more-than-1-billion-to-shore-up-ust-stablecoin-sources</ref>. The deal would allow several large investment firms to purchase discounted and locked LUNA tokens. | As concern for a death spiral kept mounting, The Block reported that the Luna Foundation Guard was raising over $1b to prevent any further damages<ref>https://www.theblockcrypto.com/post/145978/luna-foundation-guard-seeks-more-than-1-billion-to-shore-up-ust-stablecoin-sources</ref>. The deal would allow several large investment firms to purchase discounted and locked LUNA tokens. | ||
[[File:Binance UST-USDT Chart.png|thumb|Binance UST Chart]] | [[File:Binance UST-USDT Chart.png|thumb|Binance UST Chart]] | ||
When the price of LUNA kept declining, rumours spread that the deal had fallen apart and that the bailout would not be coming after all and UST further declined to a low of $0.22. | When the price of LUNA kept declining, rumours spread that the deal had fallen apart and that the bailout would not be coming after all and UST further declined to a low of $0.22. LUNA also fell by over 90% to a low of $0.69. | ||
Citadel and BlackRock denied involvement in the attack against Luna after rumours surfaced on Twitter that the two firms were involved in the attack..<ref>https://www.bloomberg.com/news/articles/2022-05-11/citadel-securities-says-not-involved-in-terra-stablecoin-crash</ref> | |||
Do Kwon tweeted that Terra would increase the redemption capacity of UST to allow the peg to stabilize quicker.<ref>https://twitter.com/stablekwon/status/1524331171189956609</ref> | |||
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As wider concerns for the health of stablecoins spread in the markets, Curve Finance saw a lot of traders swapping away from Tether's USDT. Another algorithmic stablecoin called USDN also fell to as low as $0.78.<ref>https://blockworks.co/how-will-ust-crash-impact-other-stablecoins/</ref> | As wider concerns for the health of stablecoins spread in the markets, Curve Finance saw a lot of traders swapping away from Tether's USDT. Another algorithmic stablecoin called USDN also fell to as low as $0.78.<ref>https://blockworks.co/how-will-ust-crash-impact-other-stablecoins/</ref> | ||
Crypto markets also declined by over 20% with some currencies tied to the Terra ecosystem falling by over 60% in two days.<ref>https://decrypt.co/100102/not-just-terra-apecoin-avalanche-solana-shiba-inu-all-down-at-least-20-in-crypto-crash</ref> | |||
== Sources == | == Sources == | ||
<references /> | <references /> | ||
[[Category:History]] | [[Category:History]] | ||